TORONTO--(BUSINESS WIRE)--Ether Capital Corporation (“Ether Capital” or the “Company”) (NEO: ETHC) announces its financial results as at and for the three- and nine-month periods which ended September 30, 2022. The financial highlights below include reference to changes in the financial position at the end of the second quarter June 30, 2022 in addition to year end together with the comparative results for the three- and nine-month periods ended September 30, as follows:
Financial position and results as at and for the third quarter and year-to-date:
Assets & Equity |
September 30, 2022 |
June 30, 2022 |
December 31, 2021 |
|
|
|
|
|
|
Total Assets ($ millions) |
$92.4 |
$67.4 |
$220.3 |
|
Digital Assets ($ millions) |
$83.3 |
$58.6 |
$210.4 |
|
Cash & Marketable Security ($ millions) |
$3.35 |
$3.84 |
$3.41 |
|
Equity Value ($ millions) |
$88.40 |
$66.20 |
$219.80 |
|
Book Value Per Share |
$2.62 |
$1.97 |
$6.50 |
|
|
|
|
|
|
|
3 Months |
3 Months |
9 Months |
9 Months |
$000s |
Sept 30, 2022 |
September 30, 2021 |
September 30, 2022 |
September 30, 2021 |
|
|
|
|
|
Revenue |
$706 |
$377 |
$2,960 |
$768 |
Percentage of Ether that is Staked |
46.5% |
0.00% |
46.5% |
0.00% |
Staking Yield |
4.67% |
n/a |
4.84% |
n/a |
Operating Expenses |
$1,027 |
$416 |
$2,954 |
$1,155 |
Net Operating Income (Loss) |
($321) |
($40) |
$7 |
($387) |
Net Income (Loss) after OCI |
$21,786 |
$44,465 |
($131,398) |
$116,041 |
The Company’s revenue of $706,179 for the quarter included both consulting revenue of $218,226 ($1,061,296 for nine months) from Purpose Investments pertaining to its crypto ETFs (BTCC and ETHH) and $473,879 ($1,882,965 for nine months) from Staked Ether Rewards. The quarterly revenue declined primarily due to the daily average price of Ether (C$2,863 in Q2 vs. C$1,971 in Q3). There was no staking revenue in the comparable periods in 2021 given that the Company began staking Ether in December 2021. The gross yield on Staked Ether was approximately 4.67% during the third quarter compared to 4.65% in the second quarter and 4.84% year-to-date.
Operating expenses have increased year-over-year primarily related to hiring additional staff in 2022, a larger investment in investor relations, building capacity to internalize operations that are currently outsourced, and the assessment of potential new business opportunities for the Company. Details are included in the Company’s financial statements and the Management Discussion and Analysis (MD&A).
As an asset-oriented entity, the fair market value of the Company’s digital assets were materially impacted by the changes in Ether price over the period. Ether ended December 31, 2021 at C$4,676 and closed at C$1,860 on September 30, 2022, a 60% decline. During the three month and nine-month periods, the average daily Ether price was C$1,971 and C$2,847 respectively. The substantial decline in the fair market value of the core digital assets since December 31, 2021 is primarily due to this factor, and the sale of some non-core digital assets (MKR) for proceeds of $5.7 million (see table above).
The ending cash balance (including marketable securities) did not change materially over the nine-month period but declined approximately $0.5 million since June 30 to $3.35 million.
“Cryptocurrencies regained momentum, including Ether, which jumped by nearly 42% over the quarter,” said Brian Mosoff, CEO of Ether Capital. “A positive market sentiment reflected well on our Company. Due to the complex nature of Ethereum’s upgrade, many investors, including us at Ether Capital, were waiting to see how the transition to Proof of Stake would play out. The Merge proving to be a success is a significant milestone for our Company, which allows us to refine our corporate strategy to not only support Ethereum but maximize shareholder value. We expect investor confidence to continue to grow as institutional capital pours into the sector and Staked Ether withdrawals become enacted in the coming year.”
“The yield generated from our Staked Ether was 4.67% in the third quarter and averaged 5.9% during the last two weeks of September,” said Ian McPherson, President and CFO of Ether Capital. “In addition, the shift to Proof of Stake decreased the energy consumption of the Ethereum network by an estimated 99.95% and is aligned with global ambitions to fight climate change. This is something we are very supportive of at Ether Capital as it will lessen the protocol’s carbon footprint and continue to attract investors with strong ESG mandates.”
Ether Capital’s portfolio company, Wyre, withdrew in early September from a previously announced transaction with Bolt Financial. Both Wyre and Bolt agreed to remain independent businesses. As discussed in the MD&A, the Company has reduced the fair market value of its investment to $2.03 million on September 30 from $4.175 million on June 30, 2022.
Summarized below are the primary digital assets held by Ether Capital as at September 30, 2022.
|
Ether |
Staked Ether |
Staked Ether Rewards |
Units (ETH/Staked ETH) |
23,610 |
20,512 |
701 |
Fair Market Value (C$000s) |
$43,910 |
$38,149 |
$1,269 |
To access unaudited interim financial statements for the quarter, which ended September 30, 2022, please refer to the Company’s website at http://ethcap.co/. The Company’s unaudited interim financial statements, including the MD&A, have been filed on the System for Electronic Document Analysis and Retrieval (“SEDAR”) and may be viewed under the Company’s profile at www.sedar.com.
The Company will host a webinar on November 11, 2022, at 3:00pm ET to review its third quarter financial results. Ether Capital’s CEO Brian Mosoff and President & CFO Ian McPherson will also discuss the implications of Ethereum’s transition to Proof of Stake (the Merge) and opportunities for investors to generate yield in the months ahead. Go here to register.
About Ether Capital Corporation
Ether Capital (NEO: ETHC) is a leading public technology company with a long-term objective to become a central business and investment hub for the Ethereum ecosystem. The company has invested the majority of its balance sheet in Ethereum’s native utility token “Ether” as a core strategic asset and yield-generating instrument. The company is focused on financial infrastructure that supports the Ethereum blockchain and delivers corporate value. Ether Capital’s management team and Board of Directors are comprised of crypto natives, leading venture capitalists and traditional finance experts, which uniquely positions the company to identify and capitalize on opportunities in the digital asset ecosystem. For more information, visit http://ethcap.co.
The content of this document is for informational purposes only and is not being provided in the context of an offering of any securities described herein, nor is it a recommendation or solicitation to buy, hold or sell any security. The information is not investment advice, nor is it tailored to the needs or circumstances of any investor. Information contained on this document is not, and under no circumstances is it to be construed as, an offering memorandum, prospectus, advertisement, or public offering of securities. No securities commission or similar regulatory authority has reviewed this document and any representation to the contrary is an offence Information contained in this document is believed to be accurate and reliable, however, we cannot guarantee that it is complete or current at all times. The information provided is subject to change without notice and neither Ether Capital Corporation, nor any of its affiliates, will be held liable for inaccuracies in the information presented.
Non-GAAP Measures
The Company’s condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, the Company discloses the gross value of its assets, staking yield, and the net value per basic common share, which are non-GAAP financial measures. These non-GAAP measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other issuers. The Company has presented such non-GAAP measures as management believes they are relevant measures of the value of the Company’s underlying assets. Non-GAAP measures should not be considered as alternatives to the information set out in the Company’s financial statements.
Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements in regard to the Ethereum ecosystem. The Company cautions the reader not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Generally, but not always, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “on pace”, “anticipates”, or “does not anticipate”, “believes”, and similar expressions or state that certain actions, events or results “may”, “could”, “would”, “should”, “might”, or “will” be taken, occur or be achieved.
Forward-looking statements are based on information available to management at the time they are made, management’s current plans, estimates, assumptions, judgments and expectations. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: general business, economic, competitive, geopolitical, technological and social uncertainties; market volatility of Ether, uncertainties in regard to the development and acceptance of blockchain technology (including Proof of Stake and Ethereum 2.0), and the Ethereum platform and anticipated timing and impact of the Ethereum network upgrade, timing and terms of proposed transactions related to non-core asset dispositions, assumptions and judgments related to fair value estimates of investment in Wyre, and the other risk factors discussed in the Company’s Annual Information Form dated March 23, 2022, the Risk Factors section in its most recently filed management’s discussion and analysis, the Risk Factors section in its Supplement and Base Shelf Prospectus and its other filings available online at www.sedar.com. Although the forward-looking information contained in this press release is based on assumptions that the Company believes to be reasonable at the date such statements are made, there can be no assurance that the forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. In addition, the Company cautions the reader that information provided in this press release is provided to give context to the nature of some of the Company’s future plans and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update or revise any forward-looking information, except in accordance with applicable securities laws.
